{"id":441495,"date":"2021-02-23T06:03:43","date_gmt":"2021-02-23T11:03:43","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=441495"},"modified":"2021-02-23T06:03:43","modified_gmt":"2021-02-23T11:03:43","slug":"leidos-holdings-inc-reports-fourth-quarter-and-fiscal-year-2020-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/leidos-holdings-inc-reports-fourth-quarter-and-fiscal-year-2020-results\/","title":{"rendered":"Leidos Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2020 Results"},"content":{"rendered":"
\n

– Revenues: $3.25 billion for fourth quarter; $12.30 billion for the year<\/h2>\n

– Diluted Earnings per Share: $1.37 for fourth quarter, year-over-year growth of 9%; $4.36 for the year<\/h2>\n

– Non-GAAP Diluted Earnings per Share: $1.63 for fourth quarter, year-over-year growth of 8%; $5.83 for the year<\/h2>\n

– Cash Flows from Operations: $52 million used in operations for fourth quarter; $1,334 million provided by operations for the year<\/h2>\n

PR Newswire<\/p>\n<\/p><\/div>\n

\n

\n RESTON, Va.<\/span>, Feb. 23, 2021<\/span> \/PRNewswire\/ —\u00a0Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500\u00ae<\/sup> science and technology leader, today reported financial results for the fourth quarter and fiscal year 2020.<\/p>\n

\n Roger Krone<\/span>, Leidos Chairman and Chief Executive Officer, commented: “Fourth quarter results reflect the resilience of our growing portfolio with new record levels of revenue and backlog, coupled with margin expansion and further balance sheet optimization. This performance positions us for above-market growth in 2021, fueled by our talented diverse workforce who continue to engineer and deliver technologically innovative and secure solutions for our customers’ evolving needs.”<\/p>\n

\n Fourth Quarter Summary Results<\/b>\n <\/p>\n

Revenues for the quarter were $3.25 billion<\/span>, compared to $2.95 billion<\/span> in the prior year quarter, reflecting a 10.1% increase. Revenues for the quarter included $300\u00a0million and $89\u00a0million related to the acquisitions of Dynetics, Inc. (“Dynetics”) and L3Harris Technologies’ security detection and automation businesses (the “SD&A Businesses”), respectively.<\/p>\n

Operating income for the quarter was $299 million<\/span>, compared to $261 million<\/span> in the prior year quarter. Operating income margin increased to 9.2% from 8.8% in the prior year quarter. Non-GAAP operating margin for the quarter was 10.7%, compared to 10.5% in the prior year quarter, primarily due to favorable margin performance on certain contracts and higher margins on certain program wins.<\/p>\n

Diluted earnings per share (“EPS”) attributable to Leidos common stockholders for the quarter was $1.37<\/span>, compared to $1.26<\/span> in the prior year quarter. Non-GAAP diluted EPS for the fourth quarter was $1.63<\/span> compared to $1.51<\/span> in the prior year quarter. The weighted average diluted share count for the quarter was 144 million, consistent with the prior year quarter. <\/p>\n

\n Defense Solutions<\/u>\n <\/p>\n

Defense Solutions revenues for the quarter of $1.93 billion<\/span> increased $273 million<\/span>, or 16.5%, compared to the prior year quarter. The revenue growth was primarily attributable to $300\u00a0million of revenues related to the acquisition of Dynetics and program wins, partially offset by a net decrease in volumes on certain programs and the completion of certain contracts.<\/p>\n

Defense Solutions operating income margin for the quarter was 7.6%, compared to 8.9% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 8.9%, compared to 9.8% in the prior year quarter, primarily attributable to the release of a contract reserve in the prior year quarter, a net decrease in volumes on certain programs and the completion of certain contracts, partially offset by higher margins on certain program wins.<\/p>\n

\n Civil<\/u>\n <\/p>\n

Civil revenues for the quarter of $811 million<\/span> increased $38 million<\/span>, or 4.9%, compared to the prior year quarter. The revenue growth was primarily attributable to $89\u00a0million of revenues related to the acquisition of the SD&A Businesses and program wins, partially offset by a net decrease in volumes on certain programs, including negative impacts on certain contracts due to the coronavirus pandemic (“COVID-19”), and the completion of certain contracts.<\/p>\n

Civil operating income margin for the quarter was 11.0%, compared to 9.6% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 12.3%, compared to 12.0% in the prior year quarter, primarily attributable to favorable product mix and higher margins on certain program wins.<\/p>\n

\n Health<\/u>\n <\/p>\n

Health revenues for the quarter of $513 million<\/span> decreased $13 million<\/span>, or 2.5%, as compared to the prior year quarter. The revenue decline was primarily attributable to a net decrease in volumes on certain programs and the completion of certain contracts, partially offset by recoveries on certain programs previously delayed due to COVID-19.<\/p>\n

Health operating income margin for the quarter was 16.8%, compared to 13.9% in the prior year quarter. On a non-GAAP basis, operating margin for the quarter was 18.5%, compared to 16.0% in the prior year quarter, primarily attributable to favorable volume and margin performance on certain contracts.<\/p>\n

\n Fiscal Year 2020 Summary Results<\/b>\n <\/p>\n

Revenues for fiscal year 2020 were $12.30 billion<\/span>, compared to $11.09 billion<\/span> in the prior year, reflecting a 10.8% increase. Revenues for the fiscal year included $937 million<\/span> and $243 million<\/span> related to the acquisitions of Dynetics and the SD&A Businesses, respectively.<\/p>\n

Operating income for fiscal year 2020 was $998 million<\/span>, compared to $912 million<\/span> in the prior year. Operating income margin for fiscal year 2020 was 8.1%, compared to 8.2% in the prior year. Non-GAAP operating margin was 10.1%, compared to 9.9% in the prior year, primarily due to a net gain recognized upon the receipt of proceeds related to the VirnetX, Inc. (“VirnetX”) legal matter, higher margins on certain program wins and lower indirect expenditures due to cost reduction efforts in response to COVID-19. This was partially offset by negative impacts from reduced volume on certain contracts due to COVID-19 and a net gain recognized upon the receipt of the Greek arbitration award in the prior year.<\/p>\n

Diluted EPS attributable to Leidos common stockholders for fiscal year 2020 was $4.36<\/span>, compared to $4.60<\/span> for the prior year. Non-GAAP diluted EPS for fiscal year 2020 was $5.83<\/span>, compared to $5.17<\/span> in the prior year. The diluted share count was 144 million compared to 145 million in the prior year.<\/p>\n

\n Defense Solutions<\/u>\n <\/p>\n

Defense Solutions revenues of $7.34 billion<\/span> for fiscal year 2020 increased $1.04 billion<\/span>, or 16.5%, compared to the prior year. The revenue growth was primarily attributable to $937\u00a0million of revenues related to the acquisition of Dynetics, program wins and a net increase in materials volume on certain programs. This was partially offset by the completion of certain contracts and negative impacts from reduced volume on certain contracts due to COVID-19.<\/p>\n

Defense Solutions operating income margin for fiscal year 2020 was 6.9%, compared to 7.5% in the prior year. On a non-GAAP basis, operating margin for the year was 8.2% compared to 8.5% in the prior year, primarily attributable to negative impacts from reduced volume on certain contracts due to COVID-19, partially offset by higher margins on certain program wins and lower indirect expenditures.<\/p>\n

\n Civil<\/u>\n <\/p>\n

Civil revenues of $2.99 billion<\/span> for fiscal year 2020 increased $198 million<\/span>, or 7.1%, compared to the prior year. The revenue growth was primarily attributable to $243 million<\/span> of revenues related to the acquisition of the SD&A Businesses and program wins. This was partially offset by the completion of certain contracts and negative impacts from reduced volume on certain contracts due to COVID-19.<\/p>\n

Civil operating income margin for fiscal year 2020 was 9.4%, compared to 8.3% in the prior year. On a non-GAAP basis, operating margin for the year was 11.7%, compared to 10.9% in the prior year, primarily attributable to a decrease in bad debt expense and higher margins on certain program wins, partially offset by the completion of certain contracts.<\/p>\n

\n Health<\/u>\n <\/p>\n

Health revenues of $1.96 billion<\/span> for fiscal year 2020 decreased $36 million<\/span>, or 1.8%, compared to the prior year. The revenue decline was primarily attributable to the timing of program execution due to COVID-19, the impact from the sale of our health staff augmentation business in the prior year and the completion of certain contracts. This was partially offset by a net increase in volumes on certain programs, program wins and the impact from our acquisition of IMX Medical Management Services, Inc. (“IMX”) in the prior year.<\/p>\n

Health operating income margin for fiscal year 2020 was 12.0%, compared to 12.1% in the prior year. On a non-GAAP basis, operating margin for the year was 14.4%, compared to 14.3% in the prior year, primarily attributable to increased volume on certain higher margin contracts, partially offset by reduced volume on certain managed service contracts with fixed cost infrastructures that were impacted by COVID-19.<\/p>\n

\n Cash Flow Summary<\/b>\n <\/p>\n

Net cash used in operating activities for the quarter were $52 million<\/span> compared to $169 million<\/span> net cash provided by operating activities in the prior year quarter. The higher operating cash outflows were primarily due to the sale of accounts receivable in the prior quarter that did not recur in the current quarter and the timing of payroll payments.<\/p>\n

Net cash used in investing activities for the quarter were $101 million<\/span> compared to $54 million<\/span> in the prior year quarter. The higher cash outflows were primarily due to cash paid related to the acquisition of the SD&A Businesses.<\/p>\n

Net cash provided by financing activities for the quarter were $98 million<\/span> compared to $144 million<\/span> net cash used in financing activities in the prior year quarter. The higher cash inflows were primarily due to proceeds received related to the issuance of our $1.0 billion<\/span> senior notes and the timing of dividend payments, partially offset by principal payments related to refinancing of outstanding debt and higher stock repurchases in the current year quarter.<\/p>\n

Net cash provided by operating activities for the fiscal year were $1,334 million<\/span> compared to $992 million<\/span> in the prior year. The higher operating cash inflows were primarily due to the timing of payroll payments, including the deferral of tax payments under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and the receipt of proceeds related to the VirnetX legal matter.<\/p>\n

Net cash used in investing activities for the fiscal year were $2,815 million<\/span> compared to $65 million<\/span> net cash provided by investing activities in the prior year. The higher cash outflows were primarily due to net cash paid related to the acquisitions of Dynetics and the SD&A Businesses, net proceeds received in the prior year for the disposition of our commercial cybersecurity and health staff augmentation businesses and the sale of real estate properties and higher purchases of equipment and leasehold improvements associated with our new global headquarters. This was partially offset by cash paid related to the acquisition of IMX in the prior year.<\/p>\n

Net cash provided by financing activities for the fiscal year were $1,451 million<\/span> compared to $709 million<\/span> net cash used in financing activities in the prior year. The increase in financing cash inflows were primarily due to proceeds received related to the refinancing and issuance of new debt and higher stock repurchases in the prior year. This was partially offset by principal repayments of outstanding debt and the retirement of the $450 million<\/span> senior notes in the current year. <\/p>\n

As of January\u00a01, 2021, the Company had $524 million<\/span> in cash and cash equivalents and $4.7 billion<\/span> in debt. <\/p>\n

\n New Business Awards<\/b>\n <\/p>\n

Net bookings totaled $3.3 billion<\/span> in the fourth quarter of fiscal year 2020 and $17.8 billion<\/span> for fiscal year 2020, representing a book-to-bill ratio of 1.0 and 1.4 for the fourth quarter and fiscal year 2020, respectively.<\/p>\n

Notable recent awards received include:<\/p>\n